Giovanna Avendano Attorney Law firm Panama Offshore Legal Services

Panama Admiralty Law

Panama's Ship Registry is number-one worldwide, ship registration under the Panama flag is widely used by international shipping companies for the low taxes.

At the time of registering into Panamanian Merchant Marine, all vessels must pay a one time enrollment fee, based on a graded scale, plus a Government fee for registration of bill of sale is $0.20 per net registered ton or fraction thereof, plus 20% surtax. Annual tax is $0.10 per net ton, plus other charges.

Liberal labor laws concerning Panama flag vessels are also an important consideration as income earned on international shipping activities are specifically and expressly exempted from Panama income taxes.

Special favorable rates apply for registration of yachts owned by a Panamanian Corporation.

If you own a merchant shipping company, you may find it beneficial to look into registering your sea-going vessel with Panama. Panama, one of the world's largest financial centers, also offers a lot of benefits for maritime companies.

The most significant benefit is the tax break that you will enjoy under Panama's laws. Panama taxation is territorial. Panama specifically does not levy taxes on income of vessels derived from international trade. Asset protection has never been easier if you register your maritime vessels under the Panama flag.

Panama does not discriminate on the basis of residence, citizenship and nationality. Anyone who wishes to register their vessels under the Panamanian flag can do so. Panama is open to dual registration, where the vessel can be registered in both Panama and another country. This greatly facilitates vessel registration in Panama and removes the most prohibitive barriers to offshore vessel registration. Aside from that, Panama has no minimum tonnage requirement for vessel registration. For these and other reasons, Panama's open ship registry is touted as the most popular ship registry in the world.

Taking advantage of the Panama's open ship registry does not come with an expensive price tag. Your financial obligations include a one-time registration and government fee for which you can get a discount if your vessel is registered under a Panamanian-registered corporation. And you can easily apply to have your very own offshore corporation in Panama.

Taken altogether, the cost of registering and maintaining your vessel under the Panamanian flag is cheaper than other countries' ship registration costs. Looking at the big picture and taking into account the amount you save on taxes, Panama's vessel registration fees are more than reasonable.

When you register your vessel under a Panamanian corporation, revealing who owns the vessel is not necessary. Panamanian corporations are built on principles of confidentiality and privacy protection, so corporations can change ownership secretly and without fuss. You can then own a corporation in Panama anonymously and register your vessels as part of that corporation. This is one other means by which Panama can help you in your asset protection efforts.

To register under Panama's ship registry, you have to present the documents required depending on your particular situation. Generally, you will be required to present the original bill of sale of your vessel or your vessel's builder certificate if it is newly built. You must also have a Power of Attorney to execute the vessel registration and a certification that proves your vessel does not currently belong to another registry and is free of any tax duties. Of course, if you are currently registered in another ship registry but would still like to register under Panama, you just have to present a certification of consent from your current registry.